89-R-56RESOLUTION NO. 89-R-56
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF EDGEWATER, FLORIDA, AUTHORIZING THE APPROP-
RIATE CITY OFFICIALS OF THE CITY OF EDGEWATER,
FLORIDA TO EXECUTE AN AGREEMENT WITH ARTHUR
YOUNG & COMPANY TO PERFORM AUDITING SERVICES
FOR THE CITY OF EDGEWATER; REPEALING ALL
RESOLUTIONS IN CONFLICT HEREWITH AND PRO-
VIDING FOR AN EFFECTIVE DATE.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF EDGEWATER, FLORIDA:
SECTION 1: That the City Council of the City of Edgewater,
Florida, authorizes the appropriate City officials of the City of
Edgewater to execute the Agreement for auditing services with the
firm of Arthur Young & Company.
SECTION 2: A copy of said Agreement is attached to this
Resolution and by reference incorporated herein as if fully set
forth.
SECTION 3: That all resolutions or parts of resolutions in
conflict herewith are hereby repealed.
SECTION 4: That this resolution shall take effect immedi-
ately upon its adoption by the City Council of the City of Edge-
water, Florida, at a Regular meeting of said Council held on the
17 day of July ,198 9 , and approved as provided by
This resolution was introduced and sponsored by councilwoman
Bennington and was read and passed by a vote of the City Council
of the City of Edgewater, Florida, at a Regular meeting
of said Council held on the 17day of July , 198 9 ,
and authenticated as provided by law.
ROLL CALL VOTE ON RESOLUTION NO. 89/�-R--55566 AS FOLLOWS:
Mnvna
Appr ved for form:
TT EY
Res. No. 89-R-56
THIS AGREEMENT entered into this 17th day of July, 1989, between the
CITY OF EDGEWATER, a municipal corporation organized and existing under
the laws of the State of Florida, hereinafter referred to as the "City" and Arthur
Young & Company, a firm of Certified Public Accountants registered in the State
of Florida, hereinafter referred to as the "Firm."
ITNESS
That for and in consideration of the mutual performance of the terms and
conditions contained herein, the parties agree as follows:
1. Firm agrees to conduct an audit that shall be a financial and compliance
audit of all funds of the City for the Fiscal Years ending September 30, 1989,
1990 and 1991.
2. Firm will conduct the audit for purposes of expressing an unqualified
opinion on the combined financial statements for the City for the Fiscal
Years ending September 30, 1989, 1990 and 1991, prepared in accordance
with Codification of Governmental Accounting and Financial Reporting
Standards as of June 15, 1987 and subsequent pronouncements of the
Governmental Accounting Standards Board (GASB). The combining,
individual fund, and account group financial statements and schedules
will be subjected to the auditing procedures applied in the examination of
the combined financial statements. The Firm's opinion on these financial
statements and schedules will be expressed in all material respects in
relation to the combined financial statements taken as a whole and will
include the Firm's report on grant compliance and federal financial
reports as required by fimroment Auditing (Yellow Book 1988, Revised)
and Mai0r Compliance F at r a of Programs Administered y State and
Local Governments (the compliance supplement) and other guidelines and
requirements as appropriate. If unable to express an unqualified opinion,
the Firm shall notify the City Manager immediately, in writing, with copies
to the Council, stating the reasons therefore.
3. Firm agrees to prepare one original of the "Comprehensive Annual
Financial Report," including the Statistical Section, as set forth and in
conformance with GASB pronouncements, and copies of the Firm's report
of independent certified public accountants for the Fiscal Years ending
September 30, 1989, 1990 and 1991 as the City requires.
4. Firm agrees to perform a substantial portion of the audit on City premises.
City agrees to furnish adequate working space that is well lighted and
reasonably comfortable.
5. Firm agrees to provide all equipment, materials, supplies and personnel
services to perform the Audit. City agrees to provide, at no cost to the Firm,
all postage and copying costs necessary to perform the audit.
6. Firm agrees to review the systems of internal accounting controls and
administrative controls.
7. Firm agrees to prepare a letter or letters covering
a. Internal accounting controls
b. Grant Compliance
c. Management (operational effectiveness and efficiency) denoting any
substantive weaknesses observed, an assessment of their effects on
financial management, cost benefit analysis of correction(s) and
proposal of initial steps toward eliminating them.
The Firm and the City will establish an audit schedule that is mutually agreeable
each year. The following will be the basis for each years schedule:
1. Firm's interim work completed
2. Exit conference regarding Interim
Management Letter findings to City
30 days prior to September 30, 1989
and 60 days prior to end of the City's
fiscal year in subsequent years.
30 days prior to September 30, 1989
3. Firms field work completed
4. Firm to deliver two (2) copies of
the adjusted trial balance
5. Draft of letters described in
Section 1.7
6. Final letters described in
Section 1.7
7. Firm's portion of CAFR to
be completed
8. Firm to render their opinion
letter
30 days after City completes closing
of books and preparation of trial
balances and all client assistance
work as mutually agreed on each
year during the planning process
(see Appendix A for required
schedules).
30 days after City completes closing of
books and preparation of the work
described in 3 above
45 days after City completes closing
of books and preparation of the work
described in 3 above
60 days after City completes closing
of books and preparation of the work
described in 3 above
100 days after year end
30 days after completion of CAFR
9. The Firm will furnish the City with copies of the letters described in Section
1.7 and the opinion letter in quantities determined annually by the City.
1. The Firm agrees to adhere to "Generally Accepted Auditing Standards" as
established by American Institute of Certified Public Accountants
(AICPA).
2. The Firm agrees to adhere to the auditing procedures as recommended in
the AICPA's publication Audits of State and Local Government Units, as
amended.
3. The Firm agrees to adhere to authoritative guidance concerning the single
audit, including, but not limited to: The Single Audit Act of 1984;
government Auditine Standards (yellow book), Compliance Supplement for
Single Audits of Staic and Local Governments.
4. The Firm acknowledges that they are currently aware of Federal and State
Laws applicable to municipalities.
6. The Firm agrees to conduct the audit in accordance with any requirements
as may be pronounced by the State of Florida.
6. The Firm agrees to staff the audit with the assigned personnel qualified
and acceptable by the City and will not change personnel at the in -charge
level and above assigned to the City's audit without the consent of the City.
7. The Firm agrees to utilize the City's staff to perform all work of an assisting
nature, consistent with generally accepted auditing standards and
whenever qualified City employees are available.
8. The Firm agrees to maintain and make available its working papers to any
Federal or State Agency upon appropriate request and in accordance with
Federal and State grant provisions.
9. The Firm agrees to discuss the audit program with the City Manager or his
designee, as requested. If the City desires additional procedures to be
performed, they shall be covered under Section 6: Additional Services.
F. ff.MMWWVTWII
1. The Firm's fee for audit services is computed on a basis of actual time
spent. The Firm will absorb all out-of-pocket costs associated with the audit
services. On the foregoing basis, the City agrees to pay the Firm the total
fee of $32,000, $35,000 and $38,000 for the audit described by Section 1.2 of
each Fiscal Year ending September 30, 1989, 1990 and 1991. The amount as
so determined above will be final except for any adjustments or
renegotiations required under Section 4.4, 6.2, 6.3, 6.4 of this contract.
2. The Firm will render interim billings as the work progresses and the City
agrees to pay the interim billings within ten (10) days after receipt.
3. The City agrees to pay the final billing, which represents 10% of total fee as
defined above, within ten (10) days after all the following conditions have
been met:
a. Firm has rendered signed opinion letters.
b. Firm has rendered final Management Recommendation Letter to City.
4. If unusual circumstances are encountered making it necessary for the
Firm to do substantive additional work in order to render an opinion, the
Firm shall immediately notify the City Manager of such circumstances.
Both parties shall negotiate such additional compensation as appears
justified relative to the circumstances. Such additional negotiated
compensation if greater than the limitations contained in the City Charter,
must be considered by the City Commission at the earliest opportunity.
5. Firm agrees to comply with all applicable labor laws regarding
employment and pay of its employees.
Section 5: Period of Engagement
1. The period of this contract is three (3) years covering the City's Fiscal years
ending September 30, 1989, 1990 and 1991. At the end of this initial three-
year period the contract may be extended for an additional two-year period
by mutual agreement between the City and the Firm. Fees for the
additional two-year period will be negotiated at the time the contract is
extended.
Section 6- Additional Services
1. The Firm is not required to render any information or service to individuals
or to make any studies or investigations at the request of any individual,
except as herein provided for.
2. The City may, from time to time, desire the Firm to include additional
records and procedures in its audit program. Such requests for additional
work will be submitted in writing to the Firm by the City Manager and will
be subject to the limitations contained in the City Charter. The Firm will be
compensated based on its hourly billing rates as specified in Appendix B.
Additional services performed under this subsection will be billed to the
City separately from its normal billings.
3. City agrees to utilize the Firm in performing other audit services as
required. The City agrees to compensate the Firm for such other audit
services, based on its hourly billing rates as specified in Appendix B.
Should any of these other audit services be estimated to exceed the
limitations contained in the City Charter, it will be necessary to enter into a
separate contract, or amend this contract, subject to approval of the City
Council.
4. In the event any major department or fund presently operated by the City is
transferred to another agency or authority, or a new major department or
fund is added to the responsibility of the City and subject to audit under the
terms of this contract, the annual fee provided for herein shall be increased
or decreased after renegotiation for such change, the same being agreed to
in writing, subject to the approval of the City Council.
5. Firm acknowledges that the City has and will continue to issue various
bonds. As a result of issuance of these bonds, the City has come under
Section IOB (referred to as the "fraud provisions') of the Securities Act of
1933. Should additional legislation be passed requiring the City to come
under all provisions of the Securities and Exchange Commission, this
Agreement may be renegotiated by the Firm by giving written notice to the
City. Firm agrees that should this legislation be passed, they have met or
will meet all conditions imposed by the AICPA relative to firms practicing
in the SEC Practice Section.
Section 7, Termination
This Agreement (or any part thereof) may be terminated by either party at any
time on thirty (30) days written notice to the other party by certified mail, return
receipt requested. Termination under this section must be no less than 90 days
prior to year end.
Section 8, Assignment. delevation s bl t my
Neither this contract, nor the services to be performed, nor the rights accruing
under this Agreement, shall be assigned, delegated, sublet or otherwise disposed
of without first obtaining the written consent of the City.
Section 9- Conflicts of Interest
The Firm agrees that during the term of this Agreement, it will not directly or
indirectly become associated, in any manner whatsoever, with any event,
enterprise, association, contract, relationship, venture or situation of any nature
which will conflict with or compromise its independence with regard to the City
audit. In this regard, the Firm shall have the obligation of assessing its
relationship with the City and others to determine whether, in the circumstances,
it might expect its opinion to be considered independent, objective and unbiased by
one who had knowledge of all the facts.
ATTEST:
City Mangy er
CITY OF EDGEWATER, a
municipal corporation
�cogrppooration
Mayor